The publication two weeks ago by Wired Magazine of the tale of an Arizona programmer facing prison time over software used in connection with online gambling has reraised serious questions about prosecutorial misconduct in pursuing gambling-related cases.
Titled “Write Gambling Software, Go to Prison,” the piece by Kim Zetter explored the story of Bob Stuart, whose family-operated Extension Software generated about $2.3m in sales, largely to offshore companies who in turn sub-licensed the software to firms running online gambling sites, including sportsbetting.
The charges brought by New York County, NY prosecutor Cyrus R. Vance Jr. were for aiding and abetting illegal gambling, even though the prosecutors didn’t declare exactly which companies Stuart and Extension Software aided and abetted, nor how Stuart could be responsible for the use of his product in jurisdictions where it was and is fully legal.
And there was worse. Wired published an excerpted page of a plea agreement proposed by the SDNY to Stuart, in which Stuart would be “allowed” to plead guilty to two felonies connected to money laundering and abetting gambling, as long as he agreed to secretly install backdoor code into his program that would allow the DOJ to spy on anyone using Extension Software’s product, Action Sportsbook International (ASI).
As the published document shows, Stuart was expected to dance to the District Attorney’s every whim. Here’s the actual text:
Robert Stuart shall actively participate in ongoing investigations by the District Attorney. Active participation shall be as the District Attorney directs and only as the District Attorney directs. Active participation may include, but is not limited to, engaging in transactions, attending meetings, aiding in the design of software used to obtain records, usernames, passwords, and other information stored on websites using ASI, making telephone calls, and recording, or consenting to the recording thereof, transactions, meetings and telephone calls.
In other words, the SDNY asked Stuart to agree to install extra code in his program to essentially steal all customer information and transactions. Given that most of Extension’s customers are offshore themselves, and were open to sportsbetting from worldwide customers (not just the US), the above represented an attempt to violate the privacy codes of just about every other country in the world.
When Stuart refused to sign and agree to enable spying by the US, Vance and the SDNY went ahead with the indictment.
The story is a huge “wow,” even if half the outlets that re-reported it didn’t catch the fact that the indictment itself was old news. But it’s not a “wow” because of the US government attempting to go after a programmer, as the Wired story and title would have one believe.
Indeed, this isn’t even the first time programmers have been targeted. David Parchomchuk of ThrillX Systems was targeted in a similar way by Maryland prosecutors in conjunction with that state’s Blue Monday crackdown against other offshore sites in 2011, an indictment which was made to go away in a minimum way not long after.
The extent to which the responsibility for the software’s final use was being stretched here should be evident from the bluster in SDNY attorney Vance’s PR quote:
These defendants abetted large-scale illegal gambling in the U.S. and abroad. In doing so, they gave bettors an easy way to place illegal wagers, and created an appetite for further unlawful activity.
But as Wired discovered, there was a lot more to the story. And there may even be more to this than Wired knows.
